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Speaker 2: And welcome you are listening to and watching the Financial
Survival Network. I'm your host, Carrie Lutz. Well, every now
and then somebody comes along. You really have to admire
this person meeting all these challenges, financial challenges, health challenges,
coming out on top. Mark Adams, you are exactly that
kind of person. And you're the best selling author of
the book Secrets to TENX in your business and cashing
out tax free, and you kind of have a storied
career here. It's great to have you on the show.
So tell us everything you've gone through. What have you learned,
what did the three take my guys three takeaway your
life experience beating stage four cancer and turning these companies around.
Speaker 3: Yeah, well, before I get to that, thank you so
much for having me on the show. It's the privilege
to be here and listening to some of the episodes
that you've done, not all of them over fourteen years.
That's a lot of episodes. But listening to some of
your episodes, it's I've got a lot to live up to,
and I hope to do that. But to answer your question,
I guess, you know, it's a really it's a question
I get asked a lot, and I never know how
to answer it because I think that the biggest takeaway,
I guess is never give up. And when I draw that,
particularly from cancer. So in my case, when you get
diagnosed with stage four, I'm not the first person in
the world to be toldly got stage four. I'm not
the urf first person in the world to be told
that six months to go. But when I got it,
it was in the middle of COVID and we were
in We were in twenty twenty, and at the beginning
of twenty twenty, COVID was a thing that was coming,
but none of us were in lockdown that obviously there
were no vaccines or anything like that. By the end
of twenty twenty, we'd been through worldwide lockdown number one
and people were just beginning to come out in little groups.
And that's when I got diagnosed with stage four six months.
But then when they took it out, it was on
the basis to see whether taking it out would give
me a year maybe. And when you're in that scenario,
you'll give anything for it. You'll give everything for another
day with your family, with your loved ones, with your kids,
whatever it is that you want to do, you'll give
anything for that for one more day. So when I
got the original strain of COVID while recovering from the
cancer op in the hospital, pre vaccine, and you go
from six months to at that time, if you remember,
we were going through a twenty eighth day cycle. None
of us knew what was coming that we knew in
the first twelve days you would to go up to
a day five, six or seven, and it was going
to get worse or hopefully you were going to get better.
So my thirty days have been robbed from me, and
then I'm just looking at twelve. Now roll forward and
we're in twenty twenty five. I've come through that, and
the thing I learned was whatever my strategic goals a
year or a couple of years were, it came down
to minutes. Because when I was going through that COVID journey.
I was getting on YouTube every morning figuring out what
do you do on day one of COVID, day three
of COVID, day five of COVID, what's happening to other
people who's posting? What can I learn from that will
help me get through this day? And then this morning
of the day or the afternoon of the day. So
huge learning on that was doesn't matter what you plan,
life can sometimes grab you by the scruff of the
neck and give you a different plan that you just
weren't expecting. And then the other the second thing on
that was, and we didn't really talk about this pretty show,
it wasn't but listening to your background and the success
you've had previously is selling a couple of your own businesses.
In my case at that time, I reckoned mind was
worth about ten mil. You try selling a business when
you are the face of the business and you've got
maybe twelve days, maybe thirty days, maybe six months to live,
and you've got no chance. And I should know better
because I come from a corporate and then private equity background,
and you think your bulletproof and all of a sudden
you face with that and you think, have I done enough.
And the plain fact was I probably had six, seven,
eight years to look you know, of cash to an assets,
to look after my family, but I hadn't done enough.
And that bulletproof thing that you thought that you had,
you know, is disappearing out on the window because you've
got six months to go. And then when you get COVID,
you don't know what you got and there's no amount
of planning that term or you know, you can look
people black and blue in the face and say prepare, prepare, prepare,
but you know you can still find yourself in a
very difficult position.
Speaker 4: So big lesson learn from that.
Speaker 3: And the third one was really from my ten year
old who taught me that there was a better way
and so and there's context for this, but at the
time I'm going through the COVID piece and I didn't
know whether I was going to make twelve days, let
alone twenty eight days. I'm trying to give as much
information from the last three and a half years or
three and a half decades of on entrepreneurship to a
ten year old as I can in the hope that
he's going to remember and do something with it. And
one of the things I said to him, carry was
the sad reality of eight or nine out of businesses
that go to market to get sold in the let's
say sub one hundred million revenue range never get the
sticker price they want. Now, a lot of people will
tell you they never sell, and that can be true,
but they don't get the sticker price they want. And
so my son says to me, so, what happens to
the one? I said, well, you know, somebody buys that,
and we compete for the ones that we would like
along with everyone else. He said, what happens to the nine?
And I said, well, they just either that. They're a
bit like a property and not realizing he didn't know
what that meant, but from a property analogy for the listeners,
if you've got to put a property on the market,
and it's correctly priced, it's going to be three months
in contract to go under offer, and then in contract
and it's done. If it's too cheap, it's sold the
following day, and if it's overpriced a year later, it's
still on the market.
Speaker 4: Now.
Speaker 3: Yeah, so if it's languishing, you've got some choices. You
can either reduce the price.
Speaker 4: Of it so that you can.
Speaker 3: Get it sold because the market is telling you it's
not willing to pay the price that you would like
or that you want or that you need. Or you
can improve the property, maybe you do a small extension,
or you redecorate it, or you do something to improve
the property so it gets the sticker price or closer
to the sticker price that you want. You can do that,
or you can just hang out and hope that somebody
is going to come along eventually and pay the price,
which sometimes happens. Or you can take it off the market,
and a lot of businesses take it off the market,
which is why you see so many people in their
older years seventeen to eighty still working in the business,
not just because they like it, but because they've got
bills to pay and they can't get the sticker price
they want. And then when you take into account that
in some places New York, you'd lose maybe fifty percent
of the asking price in taxis and fees and distributions
and commissions from everybody that's got their fingers in the pie,
then you can see why they don't end up with
enough money to do what it is that they'd like
to do. At the next stage of their life, and
those are the retirement people, but of course there's people
in their twenties, thirties, forties, and fifties that also go
through this as well. So the kind of lesson that
when I'm explaining that to him, and I wasn't going
through that detail that we've just been through, but basically.
Speaker 4: So there's where you go. I gotcha.
Speaker 3: Yeah, he said to me, you need to work with
a nine out of ten. And I said, okay, but
you know what's your thinking? He said, he said, Dad,
what happens if their parents get COVID and they die.
Who's going to look after their families? If they didn't
sell their businesses? And you can help them, and you
need to help them. And at the point, at that point,
of course, I'm recovering from COVID, so I'm kind of
going okay, not having any idea on how you might
tackle that out, because I think fairly I was focused
on something else, like getting through COVID and then getting
through cancer. But that took me a little while to
figure out. The answer was hiding in plain sight. But
two years later, or actually as longer than that, this
is twenty twenty one, and the book came out of
last year, so twenty four, so three years it took
me to write a book. It takes a bit of
time to write a book and then get it out
so that people could you pick up a copy and
do some of the basic things to help themselves. So
the third lesson on that was wasn't really the best
human being if from a private equity point of view,
you're buying as low as you can to build value
into the business to sell as high as you can later.
And actually a much better way is to partner with
the people that own the businesses to help them on
the journey still running a business and making great money,
but not as much as private equity would make, so
that they can get, you know, significantly more on their
exit than they might have gotten if you weren't touching
base with them. And a lot of business owners when
they get to the point of selling a business don't
even consider the tax and the fees and distributions they're
going to be encountering, and by that time it's often
too late. So you know, key, key things, and so
now I get a lot more enjoyment and I sleep
a lot better at night. Helping people sort of navigate
this but it also affects younger people too. So the
book is Secrets to ten exiting the value of the business,
because there's a bunch of things that you can do
that you just wouldn't even think about, and then exiting it.
If you can tax free. You can't always exit tax free.
It depends on your circumstance, it depends on where you are,
but you can certainly tax minimize in most instances for sure.
And this makes such a massive difference to somebody selling
a business and I just you know, and I think
that's I think that's goald, But it doesn't matter what
I think. It matters that other people take advantage of
it and do something with it.
Speaker 4: What do you think?
Speaker 2: What I think reality is what counts here. Obviously, I've
saw that businesses myself. I had covid. Uh I went
in it was was getting bad, and uh, you know
what I subsequently found out is day three is make
or break.
Speaker 4: You start getting better. At day three.
Speaker 2: You're going to survive, and if you don't, then you're
probably it's going to be a lot harder and your
odd's going to way way down. So so that is
a wake up call because you're really confronted with your
mortality and you got double confronted.
Speaker 4: Maybe you getting COVID was a gift.
Speaker 2: Because it kind of it sounds like it kind of
turbocharged your immune system which then killed off the cancer.
I've heard of other things where they you know, introduce
an infection at benign infection and it kills off something
more seriously.
Speaker 4: So who knows.
Speaker 2: But but the fact is you got young kids and
you're thinking, uh, am I going to leave them at
this point? And it's it's a really hard thing to
come out. I'm thinking, am I ever are going to
see my grandchildren?
Speaker 4: You know? I ever seen my grandson and hit.
Speaker 2: His first home run in the Little League, And it's
a it's a real uh real hard thing to come
to terms with for sure.
Speaker 4: Hey, so so getting back to them.
Speaker 3: And you may, you know, make a great point carry
that I forgot to mention that you say that, you know,
having COVID thrown you as a kerbul. In my case,
they do think that having COVID cured the cancer. And
they think that because around April twenty one there were
a dozen also cases of people like me getting reported
in medical Journey. I wasn't one of them, but people
with late stage cancer and getting reported in medical journals
around the world that didn't have much of a prognosis
of survival and got COVID and all of a sudden
they couldn't find the cancer anymore, which is exactly what
happened to me.
Speaker 4: Now.
Speaker 3: The reason they think it is because I was all
over it when they told me this, like, you know,
can we bottle it because obviously we found the cure
for cancer, We're going to be gazillionaires. No, no, no, Mark,
that's not the case. What seemed to happen is that
it drives your immune system into overdrive. To your point,
and the immune system if you look after yourself, and
a good reason to get healthy if you're not, and
stay healthy if you are, is that your immune system
is actually pretty damn good at dealing with an awful
lot of stuff that we need to deal with as
human beings. And in my case, they think that it
forced the immune system into overdrive, and they think that
that did a lot to clear out the residual cancels
the cancers once the primary had gone. So when I
went back from the eight week check, I hadn't had
any chemo.
Speaker 4: I'd have the.
Speaker 3: Operation, and it was a you know, what could we
do now? And they said the good news is we
can't find any cancer. And the bad news is we've
got no idea why. And I said that bad news
and they went, well, no, I'm very very lady.
Speaker 4: Yeah.
Speaker 3: So I just I'm lucky, lucky to be here, very veryorky,
to be here and enjoy those extra days that you
talk about with your kids and your grandkids and stuff.
Speaker 2: And then you realize when you've been confronted with it
that every day is truly a gift, whether you're faced
with death or you're just going through your daily routine
and you're not happy, or you're upset over something, and
really it changes your perspective. So succession though, getting out
of a company, I've had so many guests on Mark
talking about this, like you have to build your business
with the intent of selling it and all of this.
Speaker 4: But having been in.
Speaker 2: This situation myself, it's I mean, it's easy to say
you should do it, but to actually do it, I
find it extremely difficult. I mean, I sold my company
to my largest competitor and got close to top dollar
in a situation with a family member that I didn't
want to be in and that was the added impetus.
Took me nine months to to accomplish this sale, but
it was worth every second of it. And you know
when I look at that, and I said, and my
father started the company in nineteen sixty three with my uncle.
There was no way they were thinking about being bought out.
They were just looking to make some money and provide
a service and they had no grasp of it. So
at what point do you have to change your emphasis
and look at these things?
Speaker 4: Is there a certain million question, brilliant question?
Speaker 3: And it really gets me excited because I agree with
everything that you've just said, and most people are like that.
Most people like that. So I've really in my mind,
I've sort of categorized this in six different phases. So
Phase one is you're just starting like your dad did,
started the started the business in nineteen sixty three, and
all they wanted to do was make some money, pay
some bills. So phase one, I put that in my
Phase one in my mind is zero to one hundred k,
it's just get cash in the door.
Speaker 4: Now. One hundred K to five hundred k.
Speaker 3: Is now get cash in and a bit of cash
flow that's stage two, and those two stages you're doing
most of the things yourself in today's economy. As you
come to the end of stage two, the closer to
half a million, you get in top line, maybe you've
got some vidos coming on to help you. And then
stage three is half a million to two. Now you're
beginning to do more cash flow and you're starting to
budget a little bit of other things that you can
do to grow the business. And those three stages are
probably three years, and then stage four, when you get
to two million, is grow it. So you're going from
two to ten now. And by the time you get
to ten, and that's the fourth and the fourth and
the fifth year, you would be planning if you follow
if you follow the guidelines that I would suggest, you
would be planning to be doing fifteen percent minimum in
ebit DAR. So you're turning over generateen ten in revenue,
but you're making one and a half now at this point.
What a lot of other people don't think about My
dad didn't maybe your dad didn't, is at one and
a half, you're probably worth nine to ten million.
Speaker 4: Depending on the industry that you're in.
Speaker 3: But at half a million in ebit dar you're not
worth much more than half a million itself. So there's
an exponential payoff for you if you think about a
process and a system and a formula that you can follow,
which I'm increasingly thinking of as seven years towards one
hundred million in a repeatable way that you can exit
and do it again, so you can do it in
your twenties, thirties, forties, and fifties. So to come back
into stage four, which is grow, Stage five is ten
million to one hundred million. Now, the big difference on
stage five is you start really shifting from organic to
growth to organic and acquisitative. So in the US right now,
the economy is growing four percent something like that organic growth.
Speaker 4: You know, I can't believe what they say, but yeah, yeah.
Speaker 3: But it isn't fifteen percent and it's not thirty percent,
and you can you can probably believe that. And so
in most cases there are some people that will buck
the trend in high growth industries at AI for example,
will buck that trend startups or bout that trend. But
generally speaking, you two to four percent, so organic growth
ain't going to get you there. So as you start
coming up towards the ten million in growth and you
know one million plus an ebit. One of the key
strategies that people don't think about because they're really good
at doing the thing it is that they do is
to buy other companies by acquiring. So a friend of
mine that I'm helping at the moment is in the
video editing business, and he started a company five years
ago and he's at for four hundred thousand in revenue.
It's taking him a long time to get there, and
he's taking that cash down and enjoying life a little bit.
And I started to say to him, now, as you
move forward this year and you're looking to get to
five or six hundred, then you want us in terms
of profitability ebit, Then you want to instead of buying bitcoin,
start thinking about how you're going to buy another business
like yours in a different location, because you'll double the
size of the business.
Speaker 4: In a day.
Speaker 3: So if you get yourself up to ten million ish
and you bought three more businesses of a similar size
and shape, you're going to have some cash deleverage. You're
very investable. You're at forty million or fifty million now,
and that's year five and six. And year seven is
about prepping for the exit. So if you're doing if
you're doing ten to fifteen million in EBIT, which you
should be easily by this point, if you've followed a
plan and you've been able to execute on that, then
you're going to be looking on it. Let's say on
a ten million business, you're going to be looking maybe
fifty sixty seventy is an exit sure and you cash
out at that seven year interval. Now I'm not saying
it takes seven years. I am saying that it might
take eight years or nine years, or it might be
possible to do it in five years. But the point
is you're cashing out, and by preparing for that from
year four, as you start to acquire other companies, you're
building in place a leadership team that can retire you
from the board, retire you from your job, and resign
you from everything except being a shareholder in the business,
so that when it does sell, you are not leaded
needed for very long common problem for business owners exiting
a businesses they are the business, which makes it hard
to sell and they're tied in for a long time.
And also with that repeatable model, even if you didn't
make a hundred million and you had made fifty. And
if you're doing this in your twenties, you're set. You've
covered your mortgage, you've got your school fees, you've got
money set aside. And then when you go again in
your thirties, you're going to use some of the money
that you've made not to buy in at ground zero
and do zero to one hundred k one hundred k
to five hundred k again. But you're going to come
in at two million to ten million a buy company
or companies at that size and go again. And now
it's not seven years, it's five years before you've got
those companies to appoint, where there's still plenty of mileage
in there for other investors to take it forward to
the next level. But your cash out consistently within incrementally
more in your bank account, and your role is changing.
You're teaching other people to do what you've done on
the way through that they don't know how to do
because they're behind you, not in front of you in
terms of their life journey. So I talked to a
lot of people about this as part of the secrets
to tenanting your business and cashing out tax free because
what I found in just looking at the part of
the end game when you might be retiring, is there
are so many questions I get asked from TikTok followers
who are young people just starting out in business or
YouTube or Insta or Facebook about well, how do you
prepare the business to grow? And it's a repeat it
can be done in a repeatable way, and not many people,
like I've not come across anybody that talks about it
that way. It doesn't mean that there aren't other people,
but there's so many other ways of describing this that
deal with a slither of the problem that deal with
the exit, or deal with the preparation for the exit,
or deal with growth through sales or digital marketing, or
might deal with acquisitions. Bring it all together as a
vertical skill stack and as a journey that you can follow.
Then you can do You can do one stroke too,
but I say do one a decade and take three
years off, sure, then and then go again. And that
I think for me is the huge difference that Secrets
to tenexting your business and cashing out tax free has
leveraged and led to that helps a lot of other
people that are coming up to the point where they
may be considering selling a business because they want to retire.
But there's so many but you could do this. You
could do this every ten years, you know, and so
I call it a seven year sign.
Speaker 4: Yeah, am I making sense?
Speaker 3: Does this make I mean, you've successfully sold two businesses,
and I know listening to your backstory that you know
part of the reason for yourself is you just fed
up with it and you wanted to a chain you
wanted to change. So it's not accounting for that scenario.
But if you've followed a similar blueprint in its ideology
that I'm laying out, then one would expect that you'd, well,
you cashed out in nine months, which is good because
you know they can go on for longer. But as
somebody that's been down this path, does it make sense?
Speaker 4: Oh? Totally?
Speaker 2: And in my case selling out to my I tried
to buy my biggest competitor first, but they're owned by
a corporate entity and they just didn't want to sell
them to us, and then and then they they sold
them to somebody else and that was the person I
eventually sold to. But my thought was exactly what you
were saying, because after he brought us he was, you know,
like a fifteen million dollar company, and then he was
able to sell it for way more than what he
paid for us and what he paid for that company
combined and the Yeah, last I heard he was retired
in Naples, Florida. So good for him. But you know,
I've seen it exactly. The formulae you're talking about definitely works. Hey,
So we want to find out more about you, Mark.
I want to connect with you on the web. Where
do we find you? How do we get the book?
Speaker 4: Yeah?
Speaker 3: So with your permission, I'll send you my I can
send you a link tree which has got all my
stuff in it, so people could reach out to me
they're entted to they can go to the website, they
can hit me up an email. But also there's the
book is available to Amazon, but for anybody that's a
listener to your show that might get some benefit from it,
they can get a.
Speaker 4: PDF version of it for free. O great.
Speaker 3: And so if I send you a link tree, they
can go. You know, they need to be careful because
there's two ways to get it. You can get the
free version, or if you click the wrong link, it
will take you to Amazon and you can buy.
Speaker 4: The book.
Speaker 3: You know, that's all the ways in which people can
reach out and you know, WhatsApp, email, they can hit
the website, they can go to my personal branded site
and get the book. And I'm happy to make that
available to any of your listeners.
Speaker 4: If that helps, all right, perfect well.
Speaker 2: The link will be in the show notes to this
interview on Financial Survival Network dot com. If you've got
a question from Mark myself, shoot me an email kl
at Kerrie Lets dot com and all we ask is
when you're at the site, please sign up for your
free newsletter, and over seventy five thousand of you have
done that already. Mark, been an absolute pleasure. Wish you
the best of luck, good health and talk to you again, so.
Speaker 3: And Sid to you, my friend, and thank you so
much for having me on the show. It's been an
absolute privilege for me.
Speaker 1: Thanks for listening to carry Lets's Financial Survival Network, your
solution to today's trying times. For the latest, go to
Financialsurvivalnetwork dot com. Financial Survival Network
Speaker 3: Now more than ever,